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Performance pyramid

The performance pyramid is a hierarchical measurement framework by Lynch and Cross that cascades corporate vision through four levels — from business-unit market and financial targets down to departmental operational metrics — linking.

ByHoang TruongUpdated

FrameworkLynch and Cross

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The Lynch and Cross performance pyramid stacks four levels. At the base, departments track quality, delivery, cycle time and waste. Above that, operating systems are judged on customer satisfaction, flexibility and productivity. Higher still, the business unit sets market standing and financial targets. At the apex sits corporate vision. Objectives cascade downward; performance signals flow upward.

Where it fits
SubjectManagerial AccountingAdvancedTopicDivisional Performance MeasurementAdvancedTopicStrategic Performance & the Balanced ScorecardAdvanced

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PracticeCORE

A company organises its performance measures in four levels. At the apex sits the corporate vision. The next level separates market-standing targets (customer satisfaction, quality) from financial results (cash flow, profitability). The third level tracks customer satisfaction, flexibility and productivity across operating systems. At the base, individual departments record quality, delivery performance, cycle time and waste. Objectives cascade downward; performance signals flow upward. Which performance measurement framework does this describe?

Select an answer to check your understanding.